Tue, Oct 04, 2016 - Page 11 News List

FIH Mobile says net income will fall at least 52%

FLATLINING:The Foxconn unit makes devices for clients such as Huawei and Lenovo, who are fighting Samsung for market share in a rapidly slowing sector

Bloomberg

The arm of Foxconn Technology Group (富士康科技集團) that makes smartphones for Chinese vendors including Huawei Technologies Co (華為) and Xiaomi Corp (小米) yesterday warned net income would slide at least 52 percent this year, which is expected to be the industry’s worst year on record.

FIH Mobile Ltd (富智康) blamed “customer transition” for depressing demand from major clients and pushing revenue more than 23 percent lower to less than US$5.7 billion this year.

The company expects profit of less than US$110 million this year, compared with US$20.8 million in the first six months.

That sharp fall in results would nonetheless mark an improvement from the first half of the year, when earnings plummeted 84 percent.

The Hong Kong-listed company’s biggest clients include Huawei, Lenovo Group Ltd (聯想) and Sony Corp, according to supply chain data compiled by Bloomberg. All are jostling for market share with Samsung Electronics Co and Apple Inc in a flatlining market that has seen Chinese demand tail off while Western markets stagnate.

FIH did not elaborate on its business relationships.

“There have been improvements in the group’s performance so far in the second half of 2016,” the company said in a stock exchange filing, adding that it could revise its forecasts as the year progresses.

Foxconn is the main assembler of Apple’s iPhones through Hon Hai Precision Industry Co (鴻海精密).

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